HRPD Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, May 5, 1999

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[English]

The Chairman (Ms. Albina Guarnieri (Mississauga East, Lib.): Seeing a quorum, I would like to call the meeting to order.

The committee is studying the main estimates for the fiscal year ending March 2000, votes 1, 5, 10, and 20, under Human Resources Development Canada, tabled on March 1, 1999 and referred to the Standing Committee on Human Resources Development and the Status of Persons with Disabilities—extract from the Journals of the House of Commons, Monday, March 1, 1999.

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[Translation]

Pursuant to Standing Order 81(7), we are considering the 1999-2000 Estimates Part III, Reports on Plans and Priorities, Human Resources Development Canada, Sessional paper no. 8520-361- 202, Thursday, March 25, 1999.

[English]

I call votes 1, 5, 10, and 20 under Human Resources Development Canada.

[Translation]

Welcome, everyone.

[English]

Today we are privileged to hear from the Minister of Human Resources Development, who is accompanied by Ethel Blondin, Secretary of State. The minister is here to present his plans and projections for the current fiscal year as set out in his estimates.

As you are all well aware, the minister is responsible for programs representing more than half of the government's program spending, and it is this half that is invested in Canadians who are most in need or at risk. So I invite the minister to present his vision for these programs and to tell us how they will contribute to the well-being of Canadians who need them most.

Mr. Minister,

[Translation]

you have the floor.

The Hon. Pierre S. Pettigrew (Minister of Human Resources Development, Lib.): Thank you very much, madam Chair and good afternoon to all of you here at the table.

You all know my colleague, the Secretary of State Ethel Blondin-Andrew, who works with me on the very important issues that we are responsible for. She has done an excellent job, particularly with the agreement on native human resources, which we signed last week. I am very pleased about that.

I would also like to introduce the officials from my department who are with me today. I have a new person to introduce to the committee, Ms. Claire Morris, who has been the Deputy Minister of Human Resources Development since December. Also joining me today is Mr. Guy Tremblay, the Director General of Financial Services, and several other colleagues from the Department of Human Resources Development. They are here just in case your questions are so detailed that I have to end them over to them.

I'm very pleased to be here today. This is kind of like school. I find that when May and June arrive, it's like the end of the school year. I came to Human Resources Development in October, and this is May, and so I feel as though this is the end of my third year at the Department. I know that it won't be until October, but the summers don't count.

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): The important thing is to pass.

Mr. Pierre Pettigrew: Do you think you are going to pass me?

Mr. Paul Crête: I am not the teacher.

Mr. Pierre Pettigrew: I very much appreciate that, coming from my critic within the Bloc. I am sure that the teachers are listening.

[English]

I'm very pleased to be here today to offer some comments on the year ahead for Human Resources Development Canada and on our approach to the broad social policy issues that matter to Canadians. I know you have questions, so I will try to be relatively brief and focused so that we have the best exchange possible.

I would first begin on the subject of improving the way we serve citizens. I know it is of interest to you and your constituents. We've discussed it in the House and it's been largely debated this year, and I think this is a very important topic.

[Translation]

It is a government of Canada priority to serve citizens in a way that builds trust and engages them as full participants in Canadian society. It is my belief, as well, that economic progress works in tandem with the development of our human resources.

Human Resources Development Canada is very much in the centre of individuals and their communities. This is a department that deals with about nine million Canadians in an average year. They may be pensioners, students or people looking for work or new skills. I want to ensure that we treat every one of them with dignity and respect.

[English]

Our programs and services are governed by laws and regulations. They ensure the integrity of the programs and services as Parliament intended. Our job is to administer those laws and regulations fairly, equitably, and transparently.

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At the same time, we have an obligation to protect our programs from abuse, fraud, or just plain error. Maintaining the right balance among those obligations is always our priority. I believe that as a department we have to go the extra mile. We had a very good meeting yesterday with my managers in which I invited them to go that extra mile. Let me share some of my own ideas about this.

For a very long time we've been thinking in terms of ethics of justice and ethics of entitlement. People, by law and by regulations, are entitled to this and that, and programs of course need to rely on laws and programs. I believe in the world we're moving into—that is, giving people what they're entitled to—we have to go the extra mile, in particular as the one department that is the human face of the Government of Canada, and adopt an ethic of care beyond entitlement, beyond an ethic of justice. We have to develop an ethic of care; that is, to go the extra mile to make sure we accompany people in whatever circumstances of their life they go through that we can assist.

[Translation]

HRDC staff have always had a quality service tradition. They are professionals. They are guided by a strong citizen-centred ethic. I hear this everywhere I travel in Canada. In all our communities, people are satisfied with our front-line workers, and I am pleased about that. Our commitment is to provide Canadians with services and programs that respect and respond to their needs—a service approach that is built on respect of the individual, fairness, compassion and caring.

But as I was saying, I believe that we can do more. My vision is one of a caring, citizen-centred administration—demonstrated in the way we deliver our programs, in the way we serve Canadians and in the way we communicate with citizens.

[English]

I have asked my department to take a look at our practices to see what we can do to fulfil this vision. Yesterday I chaired an electronic town hall meeting with HRDC staff from all parts of Canada. My goal was to start a dialogue on how we can do this. Let me give you just a few examples of the kinds of things we discussed.

[Translation]

I believe we can do more to ensure that people better understand the rules and regulations so they can make informed decisions, and so they know their rights when it comes to correcting honest mistakes without penalty.

We will ensure that our local offices increase their review of hardship cases and complex EI claims to ensure a fair and consistent application of policies. They will also ensure that clients are aware of recourse mechanisms. Many offices already have public liaison officers that help clients in this manner.

[English]

We are reviewing our correspondence with clients to ensure it is written in plain language, in English or in French, not in bureaucratic jargon, which no one understands. I've also asked that we review that correspondence to make sure it adopts an appropriate tone of respect for citizens. We will review the process for collection of overpayments of benefits, such as CPP and EI, to ensure that an individual's capacity to repay is respected and that we negotiate fair repayment schedules in cases of hardship.

We are working to provide applicants of CPP disability benefits better information about decisions. I appreciate that many people have difficulty understanding those rules and decisions, so we have started pilot projects to test the impact of phoning clients about a decision instead of sending a form letter.

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[Translation]

We will fine-tune the service standards that we have put in place and work on making sure that people know what to expect from us.

We will make more use of the Internet and other emerging delivery channels for programs and services.

These and many other steps will reinforce our commitment to make HRDC not just the social face of the government of Canada, but also its human face. They will help ensure Canadians are treated fairly and equitably.

[English]

My department deals with many Canadians. It processes some seven million income security program payments a month and three million EI claims a year. As members of Parliament, you know that the cases we deal with are often complex and we are not always presented with all the facts.

[Translation]

So let me make this point clear. If individuals feel they have been treated harshly or unfairly, they should discuss their concerns with us. We will always be ready to listen and make adjustments if appropriate.

The second element of my opening remarks this afternoon will centre on the social policy framework that we are establishing in Canada.

Over the past few years, Canadians have seen our government's success on fiscal issues. Our fiscal record has supported the creation of 1.6 million new jobs since October 1993 and the lowest unemployment rate since 1990.

But it has done more. Canadians can now look ahead to make important public policy choices that will strengthen our country, without the threat of deficits overshadowing every choice. We can make strategic investments that will build our social and economic base, because the evidence is clear that a strong society and a strong economy are two sides of the same coin.

[English]

That philosophy has been an important part of my priorities since I came to this portfolio. It has guided my approach to addressing the needs of children and people with disabilities. It has guided my thinking on how we can improve our employability and income support programs to meet the realities of today. If I use the word “how”, it's for a very good reason. I believe our successes don't just come from the right policies; they come from how we reach our goals. One way is by being open to the lessons of experience.

Our work to monitor the impacts of employment insurance reform is one excellent example of what I mean. I think most of us recognize the fundamental soundness of that EI reform. Still, I know that many of you may have concerns about specific issues. I myself am quite interested in finding out more about the experience of women with employment insurance. But people need to know that any changes we may eventually choose to make on any EI issue would be based on making a sound reform even better, not turning back the clock.

The other aspect of how we can most effectively reach our goals is by using the power of partnerships.

[Translation]

I believe that the more partners we can engage to define and deliver solutions, the closer we come to success. This report on plans and priorities shows that very well.

We are working very closely with the provinces and territories on issues such as the national children's agenda, and a great deal of progress is being made. Both orders of government share an understanding that it is important for Canada to invest in its children, and to do it through coordinated strategies.

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We have done our part by continuing to expand the national child benefit. The provinces are doing their part by reinvesting funds in supports for children and parents.

[English]

We are bringing that same kind of shared commitment to the concerns of older workers. We have begun work through the forum of labour market ministers to identify innovative approaches that may be worth testing. I believe we can explore solutions that might assist men and women who want to keep working and keep contributing just as they have throughout their whole working lives.

We are demonstrating that same kind of partnership on disability issues. The employability assistance for people with disabilities initiative is a common effort among governments. Many of the activities we are launching through our opportunities fund demonstrate our commitment to engage the voluntary sector as a partner in our strategies.

One example is our work with the National Educational Association of Disabled Students. Together we are identifying more post-secondary students with disabilities for work experience with my department.

[Translation]

Since we are talking about partnerships, I would point out that the Millennium Scholarship Foundation has signed two agreements, one with Ontario and one with Alberta, and I would congratulate Mr. Monty and Mr. Riddell on these agreements. I believe that this kind of partnership shows that we are extremely concerned about students throughout the entire country. As I've been saying for a year now, the federal legislation has all the flexibility you could ever imagine, which will allow us to reach the objectives of all provinces, certainly Quebec's. I can hardly wait to hear Mr. Legault's reaction, because the agreements that are currently on the table comply with the Gautrin resolution. Furthermore, these are two different agreements, which demonstrates the flexibility that is available.

Just as we are working with governments and with the voluntary sector, we are working with the private sector.

Our Canada Jobs Fund is building on the success of the Transitional Jobs Funds in job-creating partnerships that meet local priorities. Approximately 30,000 jobs have been created to date, mostly in the private sector and all in higher unemployment areas.

I could name many more examples of collaboration like that, because it is how we work across our agenda. It is what we do in communities and nationally.

[English]

My department has a full workplan before it. Our income security programs, the Canada Pension Plan, old age security, and the guaranteed income supplement, are equally important elements of Canada's social policy framework.

Now that we have secured the future of the Canada Pension Plan, we can ensure that Canadians know more about their retirement income system and how it works for them. Canada's public pensions are an investment in the future. They reflect our long tradition as a caring society. Canadians deserve to know that our retirement income system, with its good mix of public and private funds, is one of the most stable in the world. I think in the next decades we will be very proud of it, in particular when we compare some other countries who are not nearly as ready as we are in Canada to meet the baby boomers getting there.

An hon. member: That's you and I, Brenda.

Voices: Oh, oh!

Mrs. Brenda Chamberlain (Guelph—Wellington, Lib.): Madam Chairman, yesterday too they made reference to my age. I'm starting to feel very bad.

Mr. Pierre Pettigrew: That's not what I need now.

[Translation]

Income security programs have also been a major priority in our Year 2000 work. Canadians expect our computer systems to handle the Canada Pension Plan, Old Age Security or EI benefits next year, as well as they do this year. I have every confidence that they will. Those systems have been extensively tested already and certified Year 2000 ready.

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I understand your committee tabled its Report on the Social Insurance Number yesterday. I congratulate you on the report. I know you have been working hard on this issue. I can assure you that I will look closely at your recommendations, some of which I find very interesting.

[English]

Madam Chairman, you know that my department is truly one that reaches the broadest cross-section of Canadians. Service to citizens is critical to our mission. Programs and policies that reflect the priorities and needs of Canadians as they are today are indeed our objective.

[Translation]

Madam Chair, given the extent of the activities conducted by Human Resources Development Canada, I could continue for the rest of your time today, but I will end my remarks at this point.

[English]

I would be quite happy to hear your questions right after the Secretary of State, my colleague, Ethel Blondin-Andrew, makes her opening remarks. I thank you very much pour votre attention vigilante.

The Chairman: Thank you very much, Minister.

Please make your remarks, Secretary of State.

[Translation]

The Hon. Ethel Blondin-Andrew (Secretary of State (Children and Youth), Lib.): Thank you Madam Chair, Mr. Pettigrew.

Members of the committee,

[English]

as you know, investing in Canada's children and youth continues to be a high priority for our government. The minister has already spoken about the work we are pursuing on children's issues.

[Translation]

We will continue to work with the provincial and territorial governments and consult with the Aboriginal peoples of Canada on a new National Children's Agenda.

[English]

Providing our youth with access to jobs is another top priority of our government. We are following through on last year's decision to make HRDC's successful youth employment strategy a permanent initiative. This is the first year of a three-year plan to put $465 million directly into work experience opportunities, access to learning opportunities, and career information for unemployed and underemployed youth in every region of the country. That funding builds on the rest of our work on behalf of young Canadians, such as the Canada student loans program and the Canada study grants.

I also want to point out the work this department is doing in partnership with aboriginal peoples. As you are aware, last week the government announced our new aboriginal human resource development strategy. In fact, we just had a question in the House by the honourable member to my left.

[Translation]

The Strategy builds on the success of the previous initiatives with Aboriginal peoples. But the new strategy goes further.

[English]

It encourages a much more comprehensive approach to social and labour market issues by addressing needs related to youth, persons with disabilities, child care, and labour market programming. It is in the spirit of our government's self-government commitments and our response to the report of the Royal Commission on Aboriginal Peoples, which recommended a ten-year training program for aboriginal people. We've done a five-year training program for $1.6 billion. This is a big step towards fully addressing the broad range of human resource development needs for Canada's aboriginal peoples. We are accomplishing this by entering into approximately 54 agreements with aboriginal organizations to provide these services to and in their communities.

As Minister Pettigrew pointed out, we have a very active agenda for this year.

[Translation]

I thank you for inviting my colleague and me to appear before your committee and I thank you for your work.

[English]

Thank you very much. I'm happy to be here.

The Chairman: Thank you very much. I know everybody is eager to proceed to questions. We'll start with ten-minute rounds, and I'm going to ask you all to try to be faithful to the clock, because I know everyone has a question.

Madame Ablonczy, you have the first round.

Mrs. Diane Ablonczy (Calgary—Nose Hill, Ref.): Thank you, Madam Chairman. I have only ten questions, so that's 30 seconds for the question and 30 seconds for the answer.

We do appreciate you being here and your kind words about our hard work on the SIN system. We would like to think that some of the best and brightest minds in the country now have addressed this issue.

We tabled our report yesterday. I was encouraged that you said you would look closely at our recommendations. However, we asked that in fact you respond to our recommendations within 150 days, telling us which of the recommendations you're prepared to implement and presumably which of those—I'm sure there won't be any you reject. I wonder whether we could have your assurance that in fact you are prepared to respond to us within that 150 days.

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Mr. Pierre Pettigrew: Yes, 150 days is realistic. I was very impressed by the hard work you've done. I could go even further, because I had a longer QP card for the House, but honestly your work is going to be very helpful for us in addressing this difficult issue.

Mrs. Diane Ablonczy: The second issue I'd like to raise is that of CPP disability benefits. You mention this on page 2 of your remarks. You said people have difficulty understanding the decisions that are made when they apply for CPP disability. In fact, Mr. Minister, my constituents—and I know many constituents of many other members—do not really have difficulty understanding the decisions; they have trouble getting decisions. There's a huge backlog of cases moving through the review tribunal and the Pension Appeals Board. Often by the time applicants get a decision, the outcome is just too far removed from the claim they've made to really be helpful. For example, applicants are totally frustrated by this system. We have a large volume of correspondence. I know I do, and I'm sure other members do as well.

I guess my question is, could the minister tell us the current waiting times for each of these levels of appeal and what his department is doing to clean up the backlog of cases?

Mr. Pierre Pettigrew: It's too long. You're right that there is a problem there. I've heard that time and again. Definitely, there is a problem. The number of demands has increased very substantially—the number of CPP applications—for all kinds of reasons. There were slight changes in the eligibility rules. The private insurance companies keep referring all their cases to us prior to processing, using it as a filter, if you like. Provinces are also referring their cases to us for judgment. That has raised the number of demands in a very substantial way. This is a challenge, but we're already taking action.

To help tackle the problem we have organized a national blitz to improve the situation. We have allocated more experienced staff to help speed up the process. We've been doing it in the last year. We have recruited new staff for our regional offices to handle these cases. We have improved service by working with the administration of the review tribunal and the Pension Appeals Board. We have held more hearings, having added an extra 21 judges since last December, for a total of 39 judges, which means we have more than doubled the number of judges, by allowing retired judges and so on to come and work for the system. We've improved communications with clients to better explain the decisions.

In terms of new initiatives, we still want to provide more staff and more panel members for the review tribunal, more staff at the Pension Appeals Board, additional judges at the Pension Appeals Board, pilots for alternate dispute resolutions, to identify better solutions, and a review of the appeal process.

I'm told that the standard CPP disability process takes 62 days right now.

Mrs. Diane Ablonczy: Well, that's not the appeal process.

Mr. Pierre Pettigrew: Sometimes it's four to five years. I've seen some of those cases, but I'm talking about the standard here.

Mrs. Diane Ablonczy: I'm glad you're on top of the issue, and we'll certainly let you know if your initiatives are working. Next time you appear in front of us we'll give the kudos you deserve.

I'd like to just turn now to the Canada Jobs Fund. You know this is one of my very favourite issues, and I'm sure yours too. You mentioned in your remarks that 30,000 jobs have been created through these programs. I must say, there may be some people skeptical about how long term those jobs are.

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My question is really more practical. We've had correspondence from people who have claimed to have been forced out of business by competitors who have benefited from this kind of grant assistance from government. I wondered whether your department was aware that there's a downside. Jobs are created, but also competitors are disadvantaged. I wonder if you've done an evaluation on the jobs that are lost in the same industry through this kind of subsidy of business A but not of business B—whether the net effect of this kind of program has been evaluated.

Mr. Pierre Pettigrew: We are very cautious. I would like you to bring to my attention specific cases like this. I have heard of one other case in the last year where I was quite concerned. But if you have examples, it would be worth bringing my attention to them so that we really learn from these experiences and don't make the same mistakes.

We're very cautious in the consultation process to ask the industry people. We do vast consultations with the regional authorities, the municipality, and the chambers of commerce at the local level. We consult the provinces very deeply as well to make sure....

There might have been some cases where we have had this offset result, but I haven't seen many, Diane. My impression is that it could have happened. I don't question that. But it would be worth looking into it to make sure we don't repeat the same mistake. In general, we're extremely cautious and prudent and do everything we can to avoid such situations.

Mrs. Diane Ablonczy: Have you done a study at all of potential negative effects?

Mr. Pierre Pettigrew: No. Honestly, someone in my home province brought a particular case to my attention and I was surprised. But it's very late, and this is the second time I've heard something like this.

Mrs. Diane Ablonczy: I appreciate that, and perhaps if we can provide information that will be helpful, we'll do that.

I'd like to ask lots of questions on EI, but I'm sure my colleagues will cover that.

I just have one kind of policy question, and that is our falling birth rate. As we know, without future taxpayers in large numbers, our social programs, which are sometimes pay as you go but certainly depend on a strong and consistent tax base, could be in some jeopardy. There's a falling birth rate, and there's also now some appreciation of perhaps a brain drain from some of our potential taxpayers. I wonder, Mr. Minister, whether you have done any studies of these trends—I know they have been looked at in the last CPP report, for example—and have any idea at this point or formed any conclusion as to how these will affect our social programs in the long term.

The Chairman: This will have to be your last question for this round.

Mr. Pierre Pettigrew: You're quite right that since 1995 the number of births in Canada has fallen by 4.6%. I'm glad to add right now that the number of claimants for maternity benefits under EI has not fallen; it has risen a little bit. That's on the positive side, before my friends from the Bloc go on that issue.

It's a very important question right now. As you know, as a government we are working hard on the national children's agenda. We already have the national child benefit, which we have increased substantially, which helps families, in particular working poor families, to care more for their children. It could be an incentive. We will be launching on Friday in Saskatoon our national children's agenda with Premier Romanow. Indeed, we have to make sure that we are a society that still feels like caring for its children.

Mrs. Diane Ablonczy: Are there any studies on the long-term impact of the falling taxpayer base?

Mr. Pierre Pettigrew: Not in my department, but maybe Finance has done some.

The Chairman: Thank you very much.

[Translation]

Mr. Crête, you have the floor. You have ten minutes.

Mr. Paul Crête: Madam Chair, we will go right to the heart of the matter.

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On page 4, you say that you are willing to make any necessary change to improve employment insurance, but that you are not willing to go back to the old system; we agree on that point. Could you tell us exactly when changes will be made to the Act? On page 26 of the Estimates, you say this could affect seasonal and part- time workers as well as the self-employed. You mention a pilot project to simplify the benefit calculation rules and so on. You even mention simplifying the Act so that people can understand it.

Could you give us an idea of what your specific timetable is for these changes to the Act? When can we expect amendments to correct the unfair aspects of the Act?

Mr. Pierre Pettigrew: We are constantly working on that. We made a commitment to monitor the effects of our legislation, and we have already tabled two reports in the House of Commons; that work has been done. We have provided objective reports; they have been provided to Parliament, and you have consulted them. We are constantly, constantly, working on this.

You mention some unfair aspects of the Act. Some pilot projects have already been conducted to solve the problem of short weeks. When we saw that there was a major problem with short weeks, the government reacted immediately and changed its approach, and we have repeated the pilot projects for short weeks.

There can be various ways of solving certain problems with employment insurance or certain difficulties that have come about because of the new reform. They can also be solved by means of other programs. We already had this discussion together about the problems youth are experiencing. If we establish an ongoing Youth Employment Strategy with an annual budget of $155 million, in addition to all the other efforts we are making to help young people, we can correct the impact of the employment insurance system on youth by providing them with other tools, tools that are more suitable than employment insurance.

Amending the Act won't necessarily correct what you refer to as certain unfair aspects of the Act, or certain things that don't function as well in the Act. I mentioned a number of issues, including the impact on women, which is of great concern to me, as well as youth. We have established a Youth Employment Strategy for them that is working extremely well. I also work a great deal with the Forum of Labour Market Ministers on the issue of older workers, whose situation is of extreme concern, to ensure that they are getting the best possible tools they can. We are working on these issues on a continuing basis.

Mr. Paul Crête: I would like to go back to one particular point. In your very own estimates, you say:

... concerns in relation to seasonal and part-time workers and coverage of the self-employed...

Analysis of these and other issues could lead to proposals for revisions to policies or legislation.

I would like to know whether you have a specific timetable for amending the Act, as you indicate in the estimates. By the end of the session in June, can we expect specific proposals from the department that we could study in committee that would correct the problems for the next season, because many seasonal workers will be getting their benefits in the fall?

Mr. Pierre Pettigrew: We have consulted the Canadian Labour Congress to compare their assessment to our own. There are various figures out there, and we want to make sure that we are talking about the same thing, but we will not make any hasty decision.

I have looked at the CLC report and at a number of the figures that are circulating. Our department has an entirely different assessment of these figures and these impacts.

If you agree with me that we mustn't go back to the old way of doing things, you will also acknowledge that a reform of the employment insurance system that is as major as this one inevitably means changing attitudes towards this system and that amending the Act will not get people to make the additional effort that is required of them in comparison with the old system, which was not always an adequate incentive to join the labour market.

Mr. Paul Crête: One last question, Madam Chair.

When the Quebec Liberal Party travelled across the province to consult—

Mr. Pierre Pettigrew: The Liberal Party of Canada.

Mr. Paul Crête: ... the Quebec wing of the Liberal Party of Canada, isn't it true that everywhere you went, specific remarks were made about the whole issue of employment insurance? What do you make of the fact that some people even wanted to prevent you from coming to the Gaspé region and that the majority of the committee members systematically refused to look at the issue and to deal with it? Aren't you getting enough hints to realize that you have to make this issue a priority immediately, as the Bloc Québécois has been calling upon you to do?

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Mr. Pierre Pettigrew: I am extremely pleased with the consultations that the Liberal Party of Canada is currently conducting in Quebec. This is extremely important work, and the group is doing a wonderful job, and I am delighted that you recognize its importance.

I meet with tons of people. There was an incident in the Gaspé region because at the last minute, I had to change my agenda and my colleague, Martin Cauchon, replaced me. It was a scheduling problem. I realize that that offended the people in the region, and I'm sorry that I was unable to go there, because I had to meet with some people in Rivière-du-Loup. After all, these scheduling problems do happen. I regret the incident, but I would stress that we are listening to people. I believe that it is rare for a government to include processes to monitor and assess its own reform in a piece of legislation.

Our party is in the field to discuss very specific and important issues such as employment insurance, and we are also hearing very positive comments. I understand that you only hear from those who are unhappy, but I would like to point out that many people are very happy with the overall employment insurance reform. Moreover, you yourself said that we shouldn't go backwards, and that a new direction was necessary.

Mr. Paul Crête: We are always willing to hear the pros and the cons. We shall be able to strike a balance between the two. Thank you. I yield my time to my colleague, Mr. Bigras.

The Chairman: Mr. Crête, are you sharing your time with Mr. Bigras? You had three minutes left.

Mr. Bernard Bigras (Rosemont, BQ): Thank you, Madam Chair. We usually have even less time during the question period.

Thank you, Mr. Minister. This morning I read the memorandum of understanding that you have signed with Alberta, and which, let's make no bones about it, largely reflects the parameters of the Gautrin motion, which you very clearly intend to respect, as you have said often in the House of Commons. In order to respect the essence of the Gautrin motion, there will have to be a government to government proposal.

My question is very simple. Do you intend to appoint a negotiator and to propose an agreement similar to the one that you have signed with Alberta and Ontario to Quebec, not through the offices of the Foundation, but government to government, through your negotiator?

Mr. Pierre Pettigrew: Mr. Bigras, you will agree with me that it is appropriate today to congratulate the Foundation for having concluded two extremely important agreements. The points of view that the Prime Minister and myself have been expressing for a year are very well reflected in these agreements.

Allow me to read to you the letter that Prime Minister Chrétien sent to Mr. Bouchard last May 27.

... we have very carefully examined the motion that the National Assembly adopted on May 14, 1998, as well as the motion tabled by the Official Opposition in the Quebec National Assembly last May 7. Our review of these leads us to conclude that these are very valid and positive proposals, and that their objectives correspond to the spirit of Bill C-36. This bill was designed to take into account the role, the unique characteristics and programs of the provinces in the area of student financial assistance.

And I could continue.

I would like to tell you that my priority is to ensure that Quebec students, like students elsewhere throughout Canada, have access to these scholarships, because this is how we intend to celebrate the millennium. With your permission, I shall wait for Mr. Legault's reaction, since he asked us for 24 hours. We want to be sure that he has the time to respond to the agreements that were supported today by the Quebec federation of students. This morning I read that Mr. Daniel Baril said that he fully supported an agreement such as the one reached with Alberta.

Mr. Bernard Bigras: Yes. I myself spoke to Mr. Baril at 2:00 p.m. today.

Mr. Pierre Pettigrew: Oh, I am sure that you have to do that.

Mr. Bernard Bigras: You can be sure of that, since I am very thorough. He told me that he thought that the content was indeed very interesting, but that he wanted there to be a government-to- government negotiation.

Just two days ago, I heard the director general of your foundation say that when Quebec was fully aware of the content of the agreement negotiated with Alberta and Ontario, it would not be able to say no. By delegating this task to your director general, are you not avoiding all responsibility by saying that it is not up to you to negotiate, but rather up to your director general?

• 1620

Mr. Pierre Pettigrew: Mr. Bigras, I heard you on the RDI channel, and you were blocking almost all of the doors of negotiation. You said that this was not acceptable, that you didn't want that, etc..

Mr. Bernard Bigras: That is not what I said.

Mr. Pierre Pettigrew: I don't know if you were speaking on behalf of the Quebec government, or if you were merely speaking as a member of the opposition in Ottawa.

Mr. Bernard Bigras: Are you speaking on behalf of the Foundation?

Mr. Pierre Pettigrew: I am not speaking on behalf of the Foundation, but on behalf of the government of Canada. What I can tell you today is that I want to leave all possible doors open for Quebec students. I think that we should be delighted that the Gautrin resolution, which was unanimously adopted by the National Assembly, has been respected in the agreements with Alberta and Ontario, as everyone is saying today. This tells us that we are getting close to a solution that will be in the best interest of Quebec students.

[English]

The Chairman: Merci.

Madam Davies, you have ten minutes.

Ms. Libby Davies (Vancouver East, NDP): First of all, I'd like to thank both ministers for coming. I was going to ask some questions about the child tax benefit because there's still a lot of concern about the fact that the benefit isn't indexed; it doesn't go to kids on welfare or families on welfare. There's a lack of accountability about how the funds are being reinvested. However, we do have a subcommittee that's dealing with some of these issues, so I'm going to leave it, because I think I want to raise some questions around post-secondary education that actually don't get a lot of attention.

I just want to say, first of all, that I think the issue of post-secondary education and the lack of accessibility and the fact that tuition fees are going up and up, although I'm very glad that the province I'm in, and certainly Quebec has been the same...we've had a tuition freeze for the fourth year in a row now. But nationally the situation for students is really quite awful. In fact, I think one could argue quite forcefully that the federal presence or federal program around post-secondary education hardly exists.

First of all, the scholarships have been more or less privatized, and now we have an indication that the scholarships won't be available to students in first year, which I think is very contrary to a lot of information that shows that it's the students in their first year of study who are the most financially vulnerable. Certainly the loan program, because it's through the banks, is something that has been a generator of profit for big banks.

HRDC is hardly in the picture anymore, and in fact we don't even know how many dollars are actually getting to students because there haven't been any published reports on the Canada student loan program since 1995. We know that the collection of loans in default has already been turned over to private collection agencies, so again, HRDC is sort of out of the picture. I think the situation is actually very severe for students.

So I have a couple of specific questions. One, can you tell us if the credit checks on students applying for assistance are still going to be implemented by August of this year? Are there any statistics that we have or that your department has on the interest relief program and the debt reduction program? Again, I think there's a real issue of lack of transparency and accountability, and it's very hard for student organizations or for members to get information on exactly what dollars are flowing to students or whether or not these programs that were announced in the previous budget have actually been of help to students.

My main concern is that more and more we're seeing the federal government move out of the picture. So I think the urgency and the difficulties that students are facing is growing, not diminishing, despite the relief that was supposedly offered in last year's budget.

Mr. Pierre Pettigrew: Obviously you will understand that I won't comment on university fees. This is a provincial jurisdiction. The management of our institutions and the programs is clearly a provincial jurisdiction, and it is up to each jurisdiction to decide whether they increase their fees or not.

You say HRDC is less and less in the picture. We had that budget just last year, and I would say quite the contrary; these people think we're there too much. We are investing $2.5 billion. As a government, we have decided to celebrate the millennium, not by building a stadium, not by building an amphitheatre in Ottawa to the glory of the Prime Minister, for instance, as he himself said not too long ago, but on the contrary, to put it into the education of our children. We will be providing 100,000 scholarships for 10 years. That is a very important investment on the part of the Government of Canada.

• 1625

I announced yesterday that we have harmonized the Canada student loan program for students with some provinces, and we're negotiating with others. That is an important presence. If I look at the Canadian opportunities strategy, it's a 17% tax credit on student loan interest payments. That is important. One million Canadians will benefit from these new measures when they file their 1998 tax returns.

The Canada study grant is helping as well, with up to $3,000 for students with dependants.

We have a lot of measures. We have elements with disability. We allow people to save for their studies. We have been doing a lot of things in that field, whether through tax relief or extending the period of interest relief.

My feeling is that you're right, there is a very difficult situation for many students. The debt load is far too high. But that's the reason we had the education budget last year, and that's the reason we set up the Millennium Scholarship Endowment Fund, precisely to help students reduce that debt load.

Ms. Libby Davies: Madam Chair, I think part of the question, though, was to actually gather information that would be in the public domain, so that we would know exactly how many students have been assisted by the interest relief program or the debt reduction program. If that information is available, can we get an assurance that it will be made available to the committee?

Mr. Pierre Pettigrew: Absolutely.

Ms. Libby Davies: Could I ask one other question?

This is just switching to another issue, but it's something that I think is very serious in Canada, and that's the issue of homelessness. I understand that a secretariat is being set up. We know Minister Bradshaw is coordinating the effort, but there are various departments involved. From what I understand, the secretariat is being set up within HRDC, so your department is involved. I guess the question that a lot of people are asking is, if the federal government is finally acknowledging the seriousness of this issue, what can we expect to see in terms of real resources being made available to deal with what is really a very critical situation?

I don't think it's just a matter of coordination or shuffling from A to B, or robbing Peter to pay Paul. Part of the problem is the lack of federal dollars to deal with homelessness in this country.

So in setting up this secretariat, and through HRDC, I'd like to ask you what you see in terms of a commitment from the government to not just have a coordinator or a secretariat, but to provide real resources so that we can say that people won't be on the street, or 5,000 people in Toronto won't be relying on emergency shelters, or people won't be living in substandard housing. Even if the EI premiums were improved, we would be dealing with this issue, right? Part of the problem is people having just so little money that they can't afford rent.

I'd really like to know what you're thinking as a minister in terms of your department, in terms of a commitment to deal with homelessness in Canada.

Mr. Pierre Pettigrew: I agree that homelessness is a very serious problem, and it is a major concern for us as a government. It certainly is for me, as Minister of Human Resources Development. It's a growing problem in every urban centre across the country, but it has many causes, as you know: dire poverty is one of them; mental illness; addiction; abuse at home. These things isolate individuals from their communities.

My department will support Madame Bradshaw as well as we can. We are indeed providing her with support staff to make sure she does the best job possible.

When you say it is the Government of Canada's lack of funding, it's also a provincial responsibility and it is one for the communities at the municipal level. Mental illness—provinces choose to deinstitutionalize people with mental illnesses, for whatever reason, and these people end up on the street. They have a responsibility, and a big one too.

It is important to me that we understand well who are these homeless people. We don't know that yet. We don't even understand the complexity of the problem in terms of who these people are. Some people tell me 35% are people with mental illnesses, who have left provincial institutions. We have to understand the nature of the problem in order to bring the right responses.

• 1630

I can tell you that Human Resources will support Madame Bradshaw as well as we can in understanding better who are these people and in coordinating better responses with the provinces. We have a social union agreement and we have good rapport with social services ministers, and we will bring it to whatever table we need to. But we have to act.

Ms. Libby Davies: Mr. Minister, I can tell you there's been lots of information that shows the stereotype of what we think is a homeless person is actually much broader and much deeper. I went out myself and visited a number of urban and smaller communities in Canada, and I can tell you we're talking about employed people; we're talking about families; we're talking about young people; single women with kids. There is a stereotype, but it goes far beyond that.

If you want to know more about the issue, I would encourage you, and in fact ask you, if you would be willing to go with, for example, the Toronto Disaster Relief Committee, who can show you the situation firsthand in the city of Toronto, where you would get a very real understanding of the population of homeless, and that it is not just the stereotype of mentally ill people; it's much broader. Would you be willing to go on a tour like that to find out yourself?

Mr. Pierre Pettigrew: Madame Bradshaw, my colleague, has been tasked with that responsibility by the Prime Minister. I don't want to encourage these prejudices, or whatever. I am just explaining that the situation is complex.

The Chairman: Thank you. There will be another round.

Mr. Dubé.

Mr. Jean Dubé (Madawaska—Restigouche, PC): Thank you, Madam Chair.

First of all, thank you, Minister, for appearing before our committee.

I'm going to be focusing my questions on CPP disability. I could be focusing on EI, but you know my position on that and the effects it has had on my region of Canada, New Brunswick, and especially northern New Brunswick. But there's another urgent issue here, and that is the CPP disability and the backlog.

You said in your remarks to Mrs. Ablonczy, I believe, that there was an increase in applications over the past years, since probably 1993. How much of an increase do you see since 1993 for people applying for CPP disability?

Mr. Pierre Pettigrew: I would have to go to one of my assistants.

Did it double? If my memory serves me right, it tripled since 1993.

Mr. Jean Dubé: I have numbers here of how many people made initial application for disability pension and how many of these applications were accepted and rejected. Initial applications in 1993-94 were 109,000. In 1997-98 there were 70,000.

Maybe I'm wrong and I don't understand these numbers right, but according to what I have here there's been a decrease in applications to CPP disability, and this is coming from your department.

Mr. Pierre Pettigrew: Mr. Victor Rabinovitch from my department will respond.

Mr. Victor Rabinovitch (Assistant Deputy Minister, Income Security Programs, Department of Human Resources Development): Madam Chair, the number of applications has gone down to about 70,000 in roughly the last two years. There was a very large increase in the early 1990s, carrying through in the middle 1990s.

At the current time, however, the backlog, so-called, at the initial level and the first level of appeal is virtually non-existent. That part of the backlog that has been referred to in the past has been virtually eliminated.

Mr. Jean Dubé: So we have seen a decrease in applications for CPP disability. I think I'm fair in saying that. There hasn't been an increase; there's been a decrease.

• 1635

The Chairman: Mr. Rabinovitch, for the record.

Mr. Victor Rabinovitch: The large numbers you find in the system now, if I understand the question correctly, are at the second and the final levels of appeal, the second level of appeal being the review tribunal and the final level of appeal being the Pension Appeals Board. But at the initial level, which is the initial applicant, together with the first level of appeal, which is an administrative reconsideration, you do not find major backlogs there.

Mr. Jean Dubé: You also said that the waiting period is approximately 62 days. I have the national average at 66 days. But when you factor in the people who are going into review, it goes up to 150 days. That's 84 days plus 66 days. Am I correct in saying that?

Mr. Victor Rabinovitch: I'd have to look at the numbers exactly, because you are combining decision period as well as a period of waiting while people make the decision on whether to appeal or not. So numbers are added up in sequence.

On average, it is taking approximately 62 days—I say approximately because it changes month by month—for adjudications to be made at the initial level, and approximately 70 days for adjudications to be made at the first level of appeal, which is the reconsideration level. It is longer, however, at the review tribunal, which is an independent process, and longer yet again at the Pension Appeals Board, which is a judge-administered process.

The Chairman: Thank you for the clarification.

Mr. Dubé.

Mr. Jean Dubé: So what would be a fair waiting period for the department? We're looking at an average of 66 days for initial.... What would be—on behalf of the department—a fair waiting period?

Mr. Victor Rabinovitch: Madam Chair, as the minister and deputy minister know, we've established an internal standard—this is an internal standard—of 60 to 64 days for adjudication at the initial level, and I believe it's 69 days for the initial appeal, give or take a day. That's an internal standard because at the present time we measure all of the files on the basis of a sample that is taken, and the sample is then reviewed region by region. In several years' time, after we're through Y2K and we can then make major investments in our technology, we will have an information-technology-based system, and at that point we will have an automated system for measuring time and we'll be able to establish a more firm standard.

But essentially it can be 60 to 70 days for adjudication. I can add more information, Minister, if you'd like—

Mr. Jean Dubé: No, that's fine. I'm going to go on to—

The Chairman: Mr. Dubé, you have three minutes left.

Mr. Jean Dubé: I'm doing good.

On the applications that are received for CPP disability, what is the portion that are being rejected? If I'm comparing to 1993, and we're comparing to today, let's say the last fiscal year, 1998-99 or 1997-98—the last one that is complete—do you see an increase of applications that are rejected?

Mr. Pierre Pettigrew: It happened a few years ago, but not in the last year or two. I see that in January 1999, 36% of new CPP disability applications were granted. Overall, when all appeal level reversals are considered, 49% of all CPP disability applications are currently being granted.

• 1640

Mr. Jean Dubé: If I had taken into account the numbers in 1993 of 109,000 and the ones that are sent to the review board of 3,338, and if I look at today's numbers at 70,000, which is approximately what we talked about awhile ago, and 10,000 are going to appeal.... Is it fair to say that more are being sent for appeal and more initial applications are being rejected?

Mr. Pierre Pettigrew: Yes. It's probably part of the reasons why there are so many more cases as well. It is used by all insurance companies and by provinces as the first way to test a case. That goes with it.

Mr. Jean Dubé: Are you saying insurance companies are sending up to Ottawa and the provinces—

Mr. Pierre Pettigrew: It's used widely now as the system to first test the cases.

Mr. Jean Dubé: As members of Parliament, we have probably had different experiences with CPP disability. I've had many, and I have been dealing with many on behalf of my colleagues. It's not always the case, and very rarely do I see that.

As an example, I have a lady who has been disabled for the past eight years and has been rejected by the department for eight years. Finally, without new information, she has been approved. This lady has gone through hardship for eight years and has been approved.

I'm not accusing you, but there seems to be a problem with the processing of these applications.

Mr. Pierre Pettigrew: It's an evolving situation, and you're right that that is a file on which we have to work very hard.

The department is beginning a study of the patterns of grants and denials of CPP disability benefits so that we understand it better. During the course of the study, they will be looking at new ways to get information required to make the best plan and manage the disability program now and in the future. So we are it.

The Chairman: Mr. Dubé, you're out of time, but I do have some good news for you. Apparently, Mr. Rabinovitch will be appearing before the Subcommittee on the Status of Persons with Disabilities, and that is next Tuesday, May 11. So you may put more questions to him next week.

Mr. Victor Rabinovitch: Madam Chair, thank you very much.

Voices: Oh, oh!

The Chairman: It's only a reprieve.

Madam Chamberlain, you have the first round.

Mrs. Brenda Chamberlain: Thank you.

Mr. Minister, we're really glad to have you here as always, and we appreciate your time.

There are two areas that I want to focus on today. This committee is studying the older worker, and I would be interested if you could tell me a little bit about what your feelings are on that. You know that older workers in Canada are having a difficult time when they are laid off or plants close and when they don't have skills. We did have the POWA program, but we don't have that anymore.

So I'd like you to comment a little bit on what the government sees itself doing in this area—your department.

The second area, of course, and you would not be surprised that I would raise it, is the EI issue. I have concerns in that area. We've talked a number of times, as you know, on that issue, and I would just like you to comment, if you could. I know the clawback area has been a major concern for me at the $39,000 threshold, and I'd like to have you comment on whether the government or your department is going to re-examine that particular area of the act at all.

My final point on that particular area—EI—is this. Some of the claimants do seem to have difficulty in the length of time they receive benefits, and that is a big concern, because obviously people pay into it. They need it, and if it goes over four or five weeks where they don't have any money, that's really serious for people. A lot of people can't go for that length of time. So I'd like you to comment on that. Have you had many complaints in your department on that? Obviously that's administrative and can be fixed. I'd just like you to comment on that area.

Finally, I would like to comment that there's no doubt about it, EI is very important to society. It's something we really have done right. When we talk about changes and readjustments, I think it is really important to not lose sight that it's an excellent program, that it is something we absolutely have done right, and continue to do right. But there's nothing wrong with re-examining areas and trying to make it better if we need to, and also times change.

Mr. Pierre Pettigrew: I will try to deal with your questions in the appropriate order, which is the one you chose to put them to me.

• 1645

On older workers, I admitted once on a television show, and my friend from the Bloc noticed it, but his colleague, Christiane Gagnon, raised it in the House, that I do recognize that we may not have the right tools to deal with older workers. We're well aware that they have problems. I think it's important, however, that even if we're deeply concerned with older workers, in particular with some situations, we still remember that older workers are doing very well in the labour market. All in all, their situation has been steadily improving. The unemployment rate for workers aged 55 years and older dropped from 9% in 1993 to 6.3% in 1998. That's an important drop for unemployment for older workers. Older workers have relatively high earnings. They experience permanent layoffs at about the same rate as young workers.

Still, having said that, older workers do have more difficulty finding a new job once laid off. They may be forced into retirement involuntarily. Older workers generally have less formal education and lower literacy levels. They do not participate as much in continuing education or training. They may face employer prejudice because of their age. Older workers are less mobile, occupationally and geographically. So they have strikes against them that are important.

We have put aside $2 billion for all workers, including older workers, in terms of active measures to help them get active in the labour market, to assist them. I'm working right now with my partners in the provinces at the forum of labour market ministers. We are trying to work together on how to address the situation of older workers. Provinces, as you know, have an important responsibility, as well as we do, particularly in provinces that have the responsibility now for training and active measures.

We're already doing much for older workers. But I agree that these people have made a life-long contribution to our country, and we owe it to them to look at their situation.

So I think there is a very fruitful role here for the Standing Committee on Human Resources Development and the Status of Persons with Disabilities in investigating further this issue of older workers. I would certainly like to have the committee's guidance on a number of questions. One, how deep and widespread are the difficulties of older workers across Canada? What are the most appropriate measures for the Government of Canada to address constructively the problems of older workers in finding new jobs? How might the Government of Canada best ensure that its measures harmonize with and complement provincial and territorial programs and actions by non-governmental organizations as well? Is mobility, going to where the jobs are, a realistic option for older workers? It's not clear-cut. Should there be one generic program for older workers or a menu of smaller-scale programs? What should be on such a menu if we decided to go that way?

So to me that would be very helpful and very interesting, but we should work on this together. I think that's important.

On EI and clawback, we have discussed this issue a number of times. Many construction unions have brought my attention to it. It is certainly part of the elements we look at very carefully when we monitor the impact of EI reform. However, it is part of the legislation. It is not something we can deal with from an administrative point of view. So we have to take that into account in our approach to it.

I understand that clawback brings out some black market activity sometimes for some people. We have to look into that as well, because from a government point of view, you are not ever interested in helping that case. We also have social concerns with EI, the situation of women in particular, and the re-entrance requirements, which are a problem.

So I think it's important that we look at the impact of it and at the same time measure it. It is a benefit that goes for...it's the whole income supplement system that we have been trying to eliminate. We have to measure exactly what would be the impact and measure it against some other social concerns in intensity. It's part of a general picture, but it is certainly part of our major concerns. It is one of the major pressure points we hear.

• 1650

On the length of time, in 1998-99, 96% of the three million claimants received their cheques within four weeks of first making their claims. So it's not too bad. At the national level, figures for the 1998-99 year to date—February—indicate that 95.5% of claimants are being paid their first cheque on time. You will remember that during the ice storm last year I even made that quicker because of the urgent situation we were in.

Mrs. Brenda Chamberlain: Is that what we shoot for, four weeks?

Mr. Pierre Pettigrew: Yes, because you apply for it after your two-week waiting period. It takes about two weeks to process.

What we did during the ice storm, for which people in my own province of Quebec and in eastern Ontario were extremely grateful, was we narrowed it down by using some emergency powers the law gives me when there is a particular crisis situation.

Mrs. Brenda Chamberlain: But once a person is on a claim—and maybe this is too hard to answer, Mr. Minister—and let's say they get called back to work, and then they're off again on the same claim, is it still another four weeks that you shoot for in between each time? That should shorten up, should it not?

Mr. Pierre Pettigrew: No. You don't have a second waiting period when you're on claim and accept some work and you're back on it.

Mrs. Brenda Chamberlain: It's probably the people who are in that 4% who are coming to my office, obviously, when they don't get it.

The Chairman: Mr. O'Reilly, can you put your question in a minute and a half?

Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): Which one?

The Chairman: Can you be faithful to the clock?

We're having another round after this.

Mr. John O'Reilly: Thank you.

Basically, I want to deal with pensioners and baby boomers, and I'm not talking about my colleague. I would like to know what preparations the department has for that.

The other one is on the CPP. Everyone in the actuarial report says it's okay and we're ready for the baby boomers. But are we really?

I have some other questions on it, and I would like some expansion somewhere on the—

The Chairman: Please indulge me and be faithful to the time. I know you've been waiting patiently.

Mr. Pierre Pettigrew: I'm very proud that as a government we had the courage to bite the bullet, as we did. I say as a government, but we should say with the provinces as well, because, as you know, the negotiation was done with the provinces. I think it is very good that as a country we're a lot more ready than any other country I know of, certainly the European countries, for instance.

The number of pensioners will grow from 12% today to 24% in 2036. Canadians need to know that the public pension system will be there for them in the future, and that's why we made the changes we did. But we will be ready with the changes that were made. This is important. We want to preserve and protect the CPP to make sure it is sustainable and affordable and fair. That's why we begin to pay for our own, rather than just waiting for the younger generation to pay our pensions down the line. The fairness element is that we begin to pay now for later on.

So pensions will be there for future beneficiaries when they get there. The CPP is also supported by the old age security and the tax-assisted private plans and RRSPs, for which we do a lot of publicity and advertising.

So while the cost of the OAS program will increase in the future, it will indeed be manageable. I would say that the percentage of pensioners needing the guaranteed income supplement has also been declining steadily over the years as the CPP matures, and this trend is expected to continue. We will continue to examine the entire retirement income system to make sure all Canadians feel secure about their retirement years. It's very important.

• 1655

The Chairman: Thank you very much.

Mr. Johnston, you have five minutes.

Mr. Dale Johnston (Wetaskiwin, Ref.): Thank you, Madam Chairman. I would like to thank the ministers for their presentations today.

Mr. Minister, on page 17 of your report you talk about initiatives and expected results, and under initiatives you have “Federal-provincial-territorial negotiations”, in hopes that provincial barriers to interprovincial work mobility will be removed. I would like to know what progress you're making on that front. It seems to me that yesterday the Government of Ontario took some retaliatory steps in this matter. I'm talking about labour mobility interprovincially.

Mr. Pierre Pettigrew: It is a commitment that all governments have made, including the provincial governments, within the social union agreement. We had an earlier negotiation, led by my colleague, John Manley, on labour mobility in Canada.

To me, it is a very important element that a country like ours has as much mobility as possible. Indeed, with my colleagues, certainly at the tables for which I'm responsible...the social services ministers, at the forum of labour market ministers of the provinces...we're responsible for overseeing the implementation of the labour mobility chapter of that social union agreement and the agreement on internal trade, and we will be doing a lot of work certainly at our next meeting, which I think is in June. It is certainly a priority of our government, and many of the provincial jurisdictions support it.

Mr. Dale Johnston: I recognize that it's not completely within the federal government's realm, but I certainly hope the federal government will act as a facilitator and a negotiator to make sure there is free movement of goods and services interprovincially. I think free trade is a great idea, but it also has to go east and west.

Mr. Pierre Pettigrew: I absolutely agree, and I agree that our government should play a role in facilitating, and even with some leadership sometimes.

Mr. Dale Johnston: I would also like to ask about the surplus in the EI account. It's projected to be soon close to $26 billion. I'm wondering what your feeling is on that. How can you rationalize such a large surplus? In fact, what is your feeling on how much surplus is enough surplus in the EI account, recognizing of course that we need to have some funds there to compensate for or be ready for a serious downturn in the economy? It would seem to me that $26 billion is far more than is required for a downturn in an economy.

Mr. Pierre Pettigrew: How much is enough?

Mr. Dale Johnston: I guess that's what I'm asking.

Mr. Pierre Pettigrew: I know I'm tough on myself. I'm repeating the toughest part of your own question. I said quite openly at one stage that as a society we could have a debate on the way we finance a number of programs like this one, and that the government funds as well.

There is an important surplus in the account now. I'm very pleased to see all the interest people have in it. It certainly is a big change from the days when there was a deficit in the EI account. At that time, few people cared for it.

The EI deficits were financed by Canadian taxpayers. Nobody saw a moral problem. I hear words that sometimes absolutely scandalize me around the EI surplus.

Certainly the EI surplus account, the whole account, since 1986, has been integrated into the public finances of Canada. For years Canadian taxpayers have supported the deficits of the EI account. Now it's the other way around.

Some people sometimes use terrible words like “steal”. I hear that and I'm absolutely scandalized, because first of all we pay interest rates; the Government of Canada pays interest rates on the money it borrows from the EI account. Year after year it costs us a billion dollars. When you steal something, you certainly don't pay interest rates on something you've stolen.

• 1700

Canadians may decide they want to do things differently, and it's good that they express it. But many Canadians don't think that way. Right now the priorities of Canadians I think have been reflected very well in the budgets of the Government of Canada. Indeed, the money in the EI account has been used by being part of the general account of the Government of Canada, on which we have paid interest rates, to address the health budget. Who is against the health budget? Everyone said it was the priority of Canadians last year, and it was indeed used.

In the meantime, we're paying interest rates on the EI account. It is important that people express whether they want a more or less independent account. But for the time being, we'll respect the law. We'll respect the practices of accountability that the Auditor General has imposed on us since 1986.

The Chairman: Thank you very much. Unfortunately, we're out of time.

In the next five minutes, Mr. O'Reilly, you'll be asking a quick second question. You'll be sharing your time with Mr. Wilfert. Thank you.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Forget it. I don't want to share with him!

Mr. John O'Reilly: I want to make a comment, Madam Chair. When I was going through the estimates I noticed that the minister's picture is better in French than it is in English. He looks like Joe Clark.

Voices: Oh, oh!

The Chairman: Maybe we should move along.

Mr. John O'Reilly: Whoever prints these books needs help.

Mr. Pierre Pettigrew: Madam Chairman, I have very often been told that I sound better in French than in English, but this is the first time I'm told I look better in French than in English.

The Chairman: We don't want to discourage you from coming back.

Mr. O'Reilly, please put your question quickly.

Mr. John O'Reilly: Thank you, Madam Chair.

I wanted to touch on the question I asked in the House today on the commitment to develop an aboriginal human resource development strategy. Perhaps the Secretary of State could expand on that. That was my first question.

Then I'll go to Mr. Wilfert.

The Chairman: Madam Blondin.

Ms. Ethel Blondin-Andrew: Thank you, Madam Chair. I'd like to say that last week we announced the aboriginal human resource development strategy. It's a program that's designed to include all the aboriginal groups across the country. We have approximately 600 bands across the country, and we've managed to coordinate it in such a way that we have approximately 52 regional bilateral agreements—52 to 56 agreements—that empower the aboriginal groups to do what we feel should be done under the whole issue of governance. It's the first operational difference where we give the money and the responsibility, and we have a very strong accountability framework, because these are public funds.

For those of you who have a preoccupation with poverty—I know Ms. Davies does—in Vancouver and other areas, with the inner city and homelessness, the urban aboriginal groups have signed accords with the Department of Human Resources Development and the Government of Canada. We've set aside $30 million for them to undertake their own human resource development strategies and initiatives. We've also built in, for the national aboriginal organizations, some relief from constantly having to work at building capacity. So we've resourced them to that end as well.

It's a good program. It includes things for the disabled, the aboriginal disabled, for youth at risk, as well as child care. I think that's basically the expansion you were looking for on that program.

The Chairman: Thank you.

Mr. Wilfert.

Mr. Bryon Wilfert: Thank you, Madam Chair.

Mr. Minister, you said in your remarks that you want to encourage a citizen-centred administration in delivering programs the way you deal with Canadians, and I think it's very admirable. I would point out to you, though, that a four-week waiting period is not admirable. I think it's far too long. I'd like to see anybody around this table who loses their job survive for four weeks, especially if it happens and they're not prepared.

So I would say that we have to do better. That is one area where I think we need to do better than the four weeks.

• 1705

On the clawback, Mr. Minister—and as you know, as chair of the GTA caucus, I've said to you many times that seasonal workers, particularly in the construction field in the GTA, are going to be very adversely affected by the clawback. We're not happy, and my colleague here has indicated that to you.

On the east coast I know they have something—I don't know what you call it, a short work pilot program, or something like that—

An hon. member: Short weeks.

Mr. Bryon Wilfert: The short weeks program. That's obviously a problem, where in the construction trade you may work three days one week and five days the next, but they're penalized. We don't want to wait to see what happens in terms of evaluation when the clawback kicks in in Ontario. We're not happy.

So I would point out to you, Mr. Minister—and you've heard that many times, but again I want you to know that. When I see a $25 billion surplus, or whatever you want to call it, for March 31, 2000, that doesn't make me very happy.

Having said all that, Mr. Minister, one of the questions is this. In Ontario we're not very happy about transferring anything to the provincial government, for fairly obvious reasons.

On page 17 of the book, what does it mean when it says the delivery of EI employment benefits could be transferred to the provinces of Ontario and British Columbia? I have never heard of that before. Does that mean the actual EI cheques would be transferred?

Mr. Pierre Pettigrew: No, no.

Well, first of all, thank you for reiterating Brenda Chamberlain's point on the clawback. I've already answered that it certainly is part of the pressure points we're aware of, and it is certainly being taken into consideration.

The four-week period, indeed, has to be long for someone who files for unemployment. But the two-week waiting period is part of an insurance system. It is like a deductible. Any instruments program you have, there is a deductible, and the first two weeks are a deductible, if you want, in the system.

On your third question—

Mr. Bryon Wilfert: Mr. Minister, we could shorten up the next two weeks in the delivery period.

Mr. Pierre Pettigrew: Oh, yes, absolutely.

On the labour market development agreement, the negotiations with the Government of Ontario were launched formally on April 3, 1998. It is part of an offer that was made by our government in May 1996. Agreements have been signed with all jurisdictions in Canada, as you know. There are a number of issues that will need to be resolved in the negotiations and before any agreement can be signed. Many of these issues are very complex. Indeed, our primary concern is to ensure that the employment insurance fund provides Ontarians with high-quality labour market funds. It's the active measures and training elements. The EI benefits, what we call part 1 of the law, is not on the negotiating table. Only some people from the Bloc at one stage raised having—

The Chairman: One last question?

Mr. Bryon Wilfert: It says here “EI Employment Benefits”, but, Mr. Minister, if members read that—

Mr. Pierre Pettigrew: We meant employment active measures.

Mr. Bryon Wilfert: You're going to get a lot of hot calls.

[Translation]

The Chairman: Mr. Crête, you have five minutes.

Mr. Paul Crête: Mr. Minister, a little while ago you answered a question from a Reform MP saying that no one was opposed to increasing the health budget. However, we object to the fact that workers who are earning $39,000 or less are funding the health budget with their EI premiums.

Mr. Pierre Pettigrew: I understand your point of view.

Mr. Paul Crête: I would like you to give us some clarification on the surplus issue. We could say, as you have done, that interest is indeed paid on this account. We know that the $25 billion surplus in the account is more than sufficient, because the actuary told us that $10 billion would suffice. We could rather say that all of this money has been spent, that it is somewhere in the system, and that there is not really a surplus, and this would explain why you are saying that this year the surplus will be only of about $5 billion. However, I am sure that it will be $7 or $8 billion.

Mr. Pierre Pettigrew: I thank you for your vote of confidence in the labour market.

Mr. Paul Crête: In any case, the figures that you are quoting seem out of line. How can the fund decrease by $800 million in a year of growth? I do not want to open a debate on this subject, but I would like to know which of these two points of view you support.

Should the surplus effectively be returned to the fund, or should we deem it as having been spent, and no longer be part of the surplus, which would explain the government's current behaviour? If we believe there 25 a $25 billion surplus, we certainly don't need an annual surplus. For a period of one to three years, we could have a 50-50 system, because the reserve would be large enough.

• 1710

Mr. Pierre Pettigrew: The reason there is no deficit in the country is that we have used this money. We have to be realistic. Some people are upset when they see the surplus, and talk as though it were in a drawer somewhere. People seem to think that I could open a drawer and pull out $100 million. This is not true. Let's be very clear about it: the Employment Insurance Account is part of the consolidated funds of the Canadian government, and has been used in our budgets. However, the books do show a separate entry for the EI account.

Excuse me, I've lost my train of thought.

Mr. Paul Crête: You said that the UI surplus has been spent elsewhere. However, the Auditor General has confirmed to us that this amount should be applied to the system at the end of the line.

Mr. Pierre Pettigrew: Absolutely.

Mr. Paul Crête: If not, this would be illegal.

Mr. Pierre Pettigrew: Yes, but I specified that this money had been used by the Canadian government to cover expenses that were very clearly set out in its budget, and this is how we succeeded in eliminating the deficit. However, the EI account still exists, and it is there for the workers.

You have asked me if there should be a one to three year premium holiday. I don't know whether this would be very wise. I would be surprised if the Bloc Québécois supported a premium holiday. We know that social taxes in Canada are lower than in all of the other G-7 countries.

Mr. Paul Crête: Do you consider the EI program to be a social tax?

Mr. Pierre Pettigrew: I didn't mean to say that, but meant rather payroll taxes.

Mr. Paul Crête: Are you saying that EI is a payroll tax?

Mr. Pierre Pettigrew: In other countries around the world, employment insurance is considered as a payroll tax. Here, in Canada, we don't do this. Nevertheless, if you add EI premiums to payroll taxes in Canada, you will discover that our total payroll taxes are the lowest among the G-7 countries. In this competitive world, should we lower these taxes or EI premiums even more, knowing full well that we are facing competition elsewhere? This is the sort of issue that we need to seriously consider in a society such as ours.

The Chairman: A last question, Mr. Crête.

Mr. Paul Crête: Mr. Minister, in your opinion, when a worker pays an EI premium, does he think that he is paying a tax for general government purposes?

Mr. Pierre Pettigrew: No, I don't think so. I think that he is very clearly paying for insurance, should he lose his job, and for benefits that might help him to re-enter the labour market. I think that this is how workers in the country view it at the present time.

Mr. Paul Crête: So, they feel that their funds are being diverted.

Mr. Pierre Pettigrew: You are stating an interpretation that I don't agree with.

Mr. Paul Crête: No doubt.

The Chairman: Thank you. Mr. Scott.

[English]

Hon. Andy Scott (Fredericton, Lib.): Thank you very much.

Welcome, Ministers. Welcome, monsieur le sous-ministre du DRHC.

Congratulations to the translator on the last exchange. He was magnificent. It's an overlooked contribution to our work.

I welcome the openness to deal with the question of older workers, and I can't resist the opportunity to mention that if we deal with older workers better, we'll deal with CPP disability better because we'll take a lot of pressure off CPP disability if we deal with older workers, particularly the people who are not getting their claims. They're there because there's nothing else for them to do.

That's a good segue to the labour market agreements, because the older workers' groups that were in suggested that there's a problem with the labour market agreements—and I would like a comment, if I might—creaming the provinces. Because of the conditions that are placed on those agreements by the federal government, the provinces are forced to get outcomes relative to employment that sometimes force them to push people with disabilities and older workers to the back of the queue. You don't get the same immediate result with harder-to-employ people. I've mentioned this question of disability in the past, but I notice it also applies to older workers, and they gave testimony to that effect just this week.

• 1715

I really think if there's one agreement left to be made with Ontario—I think the other provinces will be quite open to this, because the provinces will say to me, the reason we're doing this is because the federal government is forcing us to because of the rigorous nature of the measures.

If we could take a look at that, it's a very important issue. The provinces are open and we still have an agreement to sign. So I would appreciate a commitment to look at that.

Finally, on EI, I think there are two different issues. One issue on EI is fixing the EI that has existed for awhile relative to the market it captures. We can fight over how well or badly it does that, but I don't think we should suffer any illusion that it's dealing with the future. What we're doing right now is dealing with the failings of the past, good or bad. I suspect there would be a debate.

I think we should also, while we're looking at it, deal with what we know will be its failings in the future. The monitoring documents demonstrate this clearly, that as the labour market changes and more people are self-employed and so on.... Therefore, it does not capture the population.

So I would like to see your reaction to the idea that we need to distinguish between fixing EI as we knew it and fixing EI as we want it to be.

Mr. Pierre Pettigrew: On the first issue of making sure older workers as well as disabled citizens are not penalized by these labour market agreements, we have to keep a very close eye on this. As you know, we have developed a very good working relationship with the provinces. We will look into the criteria, and whatever needs to be done should be done. I'm there. I wouldn't want our efficiency criteria, which are necessary to explain to Canadians that we're doing the best out of the box we have...but at the same time we certainly should not discriminate against certain categories of our citizens, in particular the two categories you mentioned.

Yes, indeed, we have to correct the mistakes of the past, and that's tough. I know that in some regions it's more difficult than somewhere else, and no one would suffer on that more than me, because I come from a region that is pretty badly affected by that.

On the problems of tomorrow, the evolution of the labour market, you're right. For instance, the self-employed were not covered by EI, and still are not. When we did the review, I understand—I wasn't there, but my department informed me that at the time self-employed were consulted and they said they did not want to be covered by the EI system. However, I do realize that the nature of the self-employed has changed a lot. We have a lot more women, for instance, who are self-employed today than they used to be. So it's no longer this consultant who's pretty well off and has some kind of other security that he can purchase. It is often more fragile, more precarious workers who are sent there by business and corporations, and indeed maybe we should revisit that.

I'd like to look into other countries to see what they do about self-employment. I can tell you the difficulties of applying it. I was self-employed for awhile. I remember very well that I liked to work very hard for nine months of the year in order to take it easy for three and sometimes four months.

It's important that there are objective criteria. When you decide to work harder for a period and not—

An hon. member: I thought you would have changed the system by now.

Voices: Oh, oh!

Mr. Pierre Pettigrew: That's before I was in government. Now there's no time off at all. But thank God I took a lot of time off before. That's why I love my job, and I'm going to be at it for awhile.

Mr. Andy Scott: You would suffer from the intensity rule now.

Voices: Oh, oh!

• 1720

Mr. Pierre Pettigrew: Good shot, Andy.

But you are quite right that we have to look into the other elements of the labour market, which are evolving.

The Chairman: Thank you.

Madam Davies, you have five minutes.

Ms. Libby Davies: Still on the UI, you said earlier that you were appalled at people using the word “stealing”; they've felt like they've been stolen from in terms of the UI. I think if you are an unemployed worker and you paid into UI and you no longer qualify because of the very stringent rules...I think people do feel ripped off. My colleague, Yvon Godin, demonstrated that very well in the report he produced, just in talking to people who were dealing with the system on a day-to-day basis.

We've talked about older workers, but I just wanted to ask you a question about young people. One of the real shocking things is that because of the new rules about the number of hours going up for new entrants, which particularly affects young people—I think there's been an increase in the number of hours from 300 to 910. The amount of coverage for young people is now very low. It's gone from 55% in 1989 down to 15% in 1997.

So the concern that I think we have in the NDP, which again came through in Mr. Godin's report, is that some of these changes are very discriminatory in terms of how they impact particularly on women and on young people.

I'd really like to know from you what you're going to do to deal with some of these changes, which have had a very severe impact. I would agree that people need to have jobs first, but if they don't have a job or they're in transition, because jobs are part-time, they're temporary, they're seasonal.... There's no question that young people are really being hard-hit by the changed rules. I'd like to know whether the department is going to review that further.

Mr. Pierre Pettigrew: Thank you very much for your question. I think I've already recognized that we need to pay a lot of attention to women. I am very concerned about the number of claims going down for women in particular, and we are looking into it quite actively, I can tell you.

On the general question of Mr. Godin's report, which was very interesting—I paid a lot of attention to it and looked into it. I always appreciate the work of our colleagues in the House of Commons. I'm very impressed. That's one thing that has impressed me since I joined the House of Commons, how members of Parliament do work hard and well on files.

I would, however, like to make sure people understand that many people who are not covered by the EI system are some of those people Andy Scott was referring to. They are often people for whom EI was never meant to be. EI was not meant for self-employed people. If you have a lot more self-employed who become unemployed, well, it's never been meant to cover them. You have a lot of people, for instance, who have expired benefits.

We are in a cycle of long-term job creation. So obviously people who are unemployed now, more than in 1992, are people who have been unemployed for a longer period of time and therefore have expired their benefits. So 78% of people who lose their jobs now or who quit with just cause are covered by the EI system.

On the young, I maintain that making EI an easy option does encourage them in a cycle of short-term jobs and dependency on EI. I come from a region where I have seen it. I was raised in Quebec City, but my family is originally from L'Isle-Verte, Saint-Éloi. I have seen that. With easy access to EI, you had 16-year-olds, when it came to the end of August...they were told they had done their stamps; don't go to school, because you've done your stamps and EI will be there for you. They are the older workers of today. They are the people who do not have the literacy skills and that sort of thing. I do believe it is imperative that we help the young, because they have a harder time to integrate into the labour market.

Unemployment for the young is still twice as high as the national average. It's improved a lot. We've had the best years in the last 20 years. In 1998, last year, 143,000 jobs created in Canada went to the young, and I'm very proud of that and very pleased.

• 1725

We must give the young tools, like the youth employment strategy, that help them get some work experience to get into the labour market, or some other tools like that. I think that is what we must give to the young.

The Chairman: Thank you, Minister.

I'm doing my best to accommodate everybody so that they get their question in. Mr. McCormick and Hec Clouthier will be sharing their time. Please be succinct. Thank you.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you, Madam Chair. Having been on this committee for only five and a half years, I appreciate the fact that you've given me some extra time.

Voices: Oh, oh!

Mr. Larry McCormick: I want to make two comments to you, Mr. Minister. I won't make a comment about your photo in French and English, but I will say that your English has improved a thousand times over in the last two years, and I wish I could say the same for myself.

HRD in New Brunswick, Quebec, and Ontario reacted so great following the disaster of the ice storm. It's one department that did go the extra mile, and all your people, and it's been very successful.

But in rural Canada, Mr. Minister, often next to the centres all across this country, part of our ridings, part of the area that Human Resources decides on income benefits, qualifications, even the Canada Jobs Fund...they decide what the rate of employment or unemployment is. Parts of our areas are near these centres where employment is good, and yet many of our areas are outside of this and our people are suffering. I know it's an area you want to address, but we have to move a little more quickly on that.

Thank you, Madam Chair.

The Chairman: Thank you for being so diligent.

Mr. Pierre Pettigrew: Thank you very much, Larry, for your good words on the ice storm. I must say that I was very proud of my department for reacting quickly and effectively on this.

On the administrative borders, I know that in a number of cases it is creating some irritants. We did not want to touch them before we had solved Y2K. All our computer people and so on are busy on the Y2K file, and it would have been very hard to ask them to do this extra work. I thought the top priority was to make sure all Canadians could get their benefits next year. But this fall we'll begin the review, now that we know the old age pension and security cheques will be ready. So we will look at these borders to make sure we treat all citizens fairly.

The Chairman: Thank you.

Mr. Clouthier

Mr. Hec Clouthier (Renfrew—Nipissing—Pembroke, Lib.): Mr. Minister, I'm very concerned here. I know we were talking earlier about transferring the benefits and support measures to the provinces, but right here on page 17 it says:

...HRDC will enter into bilateral protocols with the provinces and territories to address overlaps and gaps in youth programming, especially related to student summer jobs....

My grave concern, Mr. Minister, is we're not thinking of handing over the student summer placement jobs to the provinces, are we?

Mr. Pierre Pettigrew: No, no. We will be working more closely with the provinces to make sure we better coordinate our actions and our work. I have entered into a number of bilateral discussions to make sure we better serve the young. But we are very proud of what we're doing for the young. I think our program, which has lasted for more than 30 years, is extremely widely popular, including in the province of Quebec, and I will not transfer that program.

The Chairman: Mr. Dubé, you're going to have the last round, please.

[Translation]

Mr. Jean Dubé: I was very pleased to hear Mr. Scott and the Minister admit that we all make errors, and that the errors that have been made in the EI reform were being corrected.

Mr. Paul Crête: Including the errors made by the Conservatives.

Mr. Pierre Pettigrew: [Editor's note: Inaudible]... exercising power.

Mr. Paul Crête: We want to exercise power and have an independent fund in Quebec.

Mr. Jean Dubé: You have admitted that there are problems in hearing cases related to disability pensions paid under the Canada Pension Plan. The provinces and some private companies have raised certain cases with the federal government. I would like to know what your department is doing to correct these problems.

We recently learned of major problems with the use of social insurance numbers. Moreover, our report deplored this situation.

• 1730

A very great number of people are waiting to know whether they will be able to receive disability pensions under the CPP. I would like to know whether the provinces and the private sector are at the root of these problems, and what efforts your department is making to solve them.

Mr. Pierre Pettigrew: Just a while ago I gave you a list of the improvements that we have already made.

Mr. Jean Dubé: Could you be more specific about the provincial governments and the private sector?

Mr. Pierre Pettigrew: Are you referring to the insurance companies?

Mr. Jean Dubé: Yes. I was also referring to the provincial governments.

Mr. Pierre Pettigrew: Do you want me to tell you about our efforts to work with the insurance companies?

Mr. Jean Dubé: Yes.

Mr. Pierre Pettigrew: Ms. Catherine Drummond could perhaps tell you if anything is being done in this regard, and I am quite sure this is the case, since we have discussed it on a number of occasions recently.

The Chairman: Unfortunately, we have only a few minutes left because we will have to go to vote in the House.

[English]

Ms. Catherine Drummond (Director General, Programs Directorate, Department of Human Resources Development): I'm sorry, I'll have to answer in English.

We are talking with insurance companies, with the association, regularly about their referrals, but in fact there's nothing illegal about their asking the people who apply for private insurance to also apply for CPP disability because it's part of the rates people pay for their private insurance. There's an expectation that it will be offset.

But we are talking with the association, and I'd like to talk to you after and find some specific cases, which we will look into. And I'll be here next week.

The Chairman: Thank you very much.

Thank you for coming. I know how much you enjoy the exchanges.

The meeting is adjourned.